What is Supply Chain Management?

As I prepare to graduate from the University of Arkansas in the next few months, I want to talk about what I have learned from pursuing a degree in Supply Chain Management. It seems like many people only think of transportation and logistics when they hear the term “supply chain,” but there are many different parts that go into a supply chain. So, what even is a supply chain or supply chain management? I’ll start with a definition of each from the knowledge I’ve gained at the University of Arkansas.

Supply Chain Management is the management process from sourcing materials all the way to getting a product to the final consumer with three flows – goods and services, financial resources, and information.

A supply chain is a set of systems that facilitate the flow of goods and services, information, and finances.

Yes, there is a difference between supply chain management and a supply chain. Supply chain management is managing the process and functions that are within the supply chain. Some of these processes in a supply chain include:

·??????Supplier sourcing?

·??????Inbound Transportation

·??????Inbound Distribution

·??????Manufacturing

·??????Outbound Distribution

·??????Outbound Transportation

Supply chains start with the sourcing and procuring of raw materials. These raw materials then must be transported and sometimes stored before being manufacturing into a product. Once products are manufactured, they must be transported again to a warehouse or distribution center before finally reaching the retailer for the customer to purchase. All these different processes include an upstream (away from customer) and downstream (towards the customer) flow of information, goods & services, and money.?

There are also products that need to be returned and go back upstream the supply chain. This is called reverse logistics. Have you ever tried returning a product to a company and that company tell you to just hold on to it and that they’ll just send you the right product? This happens often. The reason for this is because returning a product can sometimes be more expensive for a company than just sending another product to you.?

Let’s talk about why supply chains exist. Supply chains exist for the main purpose of meeting the customer’s needs, or said differently, providing customers with utility. Utility is the customer’s perceived value. There are four types of utility, including time utility, place utility, form utility, and possession utility. Time utility ensures products are readily available when customers want them. Place utility refers to the availability of goods in a desirable location. Form utility refers to the characteristics of the product that is available to customers. Possession utility provides ownership and direct access to product benefits. All four of these utilities are important because they all bring value to the customer, which is the most important thing to remember in supply chain management.?

The last thing I’ll talk about are the three main functions of supply chain management. The first is logistics. This function helps bring customers value through time and place utility. Logistics focuses on ensuring goods are transported to the desired location and making sure goods are readily available when customers want them. The second main function of supply chain management is operation/production. This function brings value to customers through form utility by making sure the characteristics of a product matches the want of the customer. The last main function of supply chain management is marketing. This function brings value to customers through possession utility. Customers can’t find value from a product if they don’t know about a product or don’t know what that product’s purpose is. All three functions work together to bring value to the customer in unique ways.

So, how does all this relate to a transportation internship??

Well, in my internship I get to focus on work that brings value to the customer through the logistics function. All the work done is targeted at making sure products are being transported to the right location and get to the end customer when they need the product. The work done in my internship is focused on bringing time and place value to the final customer. Hopefully this article helped make aware the importance of transportation and logistics in a supply chain.?

The aim of this article was to make you more knowledgeable and aware of supply chains and the purpose and importance of supply chain management. This is why it has become an even bigger focus since Covid-19. I know that there are many details left behind in this article regarding supply chain management, but this should cover the foundation of what supply chain management is. I am so thankful to be pursuing this degree at the University of Arkansas.?